"PSP2 Will be Dead on Arrival" says Pachter
by Nicholas Taylor, posted on 06 December 2010 / 17,244 Views
Well-known analyst for Wedbush Morgan Securities, Michael Pachter, said that he thinks the handheld market is "in trouble", and that he thinks the PSP2 "is going to be dead on arrival".
When speaking on the latest episode of his show Pach Attack, he said that he feels the market is reaching saturation point. “We’re way approaching saturation on the handheld market,” he said.
“We’re starting to see DS hardware sales crack, I think the big woody of the iPod Touch is cutting into the handheld market, I think the PSP is dead on arrival and I think the PSP2 is going to be dead on arrival.”
“It looks to me like young kids are just as happy playing with an iPod Touch or a Nano. The Touch is cool, it plays games, plays music, they’re going to put a camera in it and you’re going to get all kinds of cool stuff.”
He did, however, have some positive words to say regarding Nintendo's new 3DS, but also that after an initial spike, sales will dip and hand the incentive back over to Apple.
“The 3DS will prolong the handheld market for the game manufacturers, but ultimately, I think handhelds are in trouble. I really think as the iPod Touch gets more and more powerful, you’re going to see a lot of free games over there.”
“What’s the difference if you play Tetris on an iPod Touch or on a DS? Well, you pay a buck on the iPod Touch, you pay $20 on the DS. Parents prefer $1 or free software, I think the iPod Touch is going to sell really, really well. So, after the 3DS has had its little rush I think the handhelds will continue to decline.”
Nintendo 3DS is set for release around March 2011 in America and Europe, while the PSP2 seems to be expected to be released sometime around the end of 2011.
95 Comments
I would like to hear this opinion now that we know what the hell the NGP is.
Pachter is right about the portable market. Iphones and Ipod touches are slowly chipping away at Nintendo and Sony's market share and will eventually force them to address the issue of price. Will probably see ninendo and sony attck the market more aggresivley with the 3DS and the PSP2. $1 and $5 games will become the staple of these products with the big $20 titles coming every now and then.
I forgot only young kids play portable systems, Pachter could quite possibly be the absolute worst "analyst" in the history of video games. Period. And the handheld market in trouble? He must not be aware of a little country named Japan, and as he says this the psp sells nearly 350k in one week in japan. The Ds prints money and its only going to get better from here, I believe pachter couldnt be anymore wrong. When the 3ds and psp2 drop its going to only further strengthen portable systems meant for gaming.
I will never buy a 3DS, ever. Unless they put Castlevania on it, at which point I will strongly consider stealing so that I don't have to pay $200-$300 for an "upgraded" DS.
"again. doesn't really matter." That's probably what Sony says as well.
"That argument is retarded when Sony fanboys use to point out PS3 FF XIII sales over 360 sales and it's just as retarded here. 1st place, 2nd place etc, are good for one thing, nice looking press releases. In reality all these companies care about is the profit. and when your hardware has north of 60 million sales that's a huge potential for profit if you can get people to buy the software, regardless if your competitor has double the hardware sales." Still the loser. On both fronts.
"The problem is if you are second in a race of two you are the loser." That argument is retarded when Sony fanboys use to point out PS3 FF XIII sales over 360 sales and it's just as retarded here. 1st place, 2nd place etc, are good for one thing, nice looking press releases. In reality all these companies care about is the profit. and when your hardware has north of 60 million sales that's a huge potential for profit if you can get people to buy the software, regardless if your competitor has double the hardware sales.
"The problem was never hardware sales. It was software sales. Which were and continue to be abysmal." The problem is if you are second in a race of two you are the loser.
"PSP sold millions more than the 360 and PS3 yet people still doubt the PSP brand. I don't know what to say." The problem was never hardware sales. It was software sales. Which were and continue to be abysmal.
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"Pretty sure PSP2 will do just fine, its Sony after all, PS3 was destined to fail on paper." Sony totally ruled for 2 generations and now they are in third place. That sounds like a fail to me.
PSP sold millions more than the 360 and PS3 yet people still doubt the PSP brand. I don't know what to say.
The thing that he fails to recognize is that the 3DS and PSP2 are not just game machines. 3DS will also provide 3D movie playback. The PSP2 will be multi-fuction (games, movies, music, web browsing and possibly e-reader). Dedicated handheld game systems are dead. We won't see anymore of them. We will just see a host of multi-function devices, some which are better at games than others. Gamers will go to the ones that have the best games.
This guy obviously doesn't know the gamer community very well, I would rather buy 2 psps2 (I'm a Nintendo Fanboy) before gaming in an Ipod Touch.
He said Borderlands was destined to fail. Actually most of this guys predictions are wrong the only ones that has been right are predictions that everybody made, like that there would be a 360 slim. Pretty sure PSP2 will do just fine, its Sony after all, PS3 was destined to fail on paper.
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Hes right about the PSP2 but I think the 3ds will match the ds - sales wise.
I'll be getting the 3DS day one when it's released. Already have an IPod and a phone, so I don't need either of those again. Sure some of the games on the IPod/IPhone are cheap, but you can't resell them either. I can resell all my PSP and DSi games. PSP and DS sales are increasing right now due to the holiday, but once Spring rolls around the 3DS is going to be HOT, HOT, HOT. Didn't IPad sales take a huge dip during Black Friday? lol!! Patcher doesn't have a clue 1/2 the times. As long as the PSP2 is not like the PSP Go it will be a hit. They better keep the UMD or allow us to download the games we own for FREE.
I'm starting to feel like getting a PSP 2 now ;) And I'm a total Nintendo Fanboy who will be getting a 3ds on day one. To me it's all about supporting traditional gaming platforms right now rather then selling out to the jack of all trades master of none ipod.
so he says price + music > dual screen + better controls + 3D + N games.... that last one alone is enough to beat the ipod. I do agree though that there is no place for a second competitor in the handheld market anymore. Sony is making the right choice to go with a phone...though they will have to scale their software prices.
Yeah, yeah, and so was Red "Dead" Redemption, right? Hey guise, see what I did there? :p Geez I'm so awesome it's not even believable. Just like Pachter's predictions :)
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I wonder what Pachter regards as "little rush" for 3DS. Likely he'll claim he's right no matter what happens. If 3DS matches DS and sells brilliantly for 6 years, he'll claim the iOS platforms have outlasted it and that the 3DS only had a "little rush". If 3DS is only widely successful for a couple of years, he'll claim he was completely right.
LOL if PSP2 manage to trouce next DS, then next gen is gonna be even worst fanboy wise than this gen mark my words theres gonna be a mix of rage,damage control,gloating and other reasons.
He said the same thing about Borderlands and look what happend then. A lot of things he says turn out to be wrong, i need have his job if it's that easy lol.
Tetris doesn`t sell handhelds pachter >_> Its games like mario, pokemon and golden sun. And in japan; monster hunter freedom too. You won`t get those for free on the Itouch.
I don't think the PSP2 will do much outside of Japan, but I doubt it will be dead on arrival. Many will give it a shot like they did the original and the small group that did for the PSP Go. Will it impact the 3DS or iPod areas, I doubt it. But truthfully, I am think the iPod itself is in more trouble from the various smart phones and the iPhone itself then I see it possibly being the one to destroy the handheld market.
How is the PSP dead on arrival? It sold over 60 million units, lmao. The estimated LTD sales of iphone is floating right around 60 million as well. Is iphone DOA? What a moron this guy is. As for his PSP2 prediction, he said borderlands was DOA, again, he is likely to be wrong.
I don't think the time of the iTouch of ruling is here yet. I think the PSP2 will do just fine. I do agree that the 3DS isn't going to be as big as a lot of people thing. Though I think it will still be big.
@ Siko 1989, I didn't know the world consists of only chinese and indian...
actually 6.5 billion people on earth.....post with correct information please
@Freyt theres about 2 billion people living on Earth anything is possible :D
i mostly agree with pachter but not on this im actually looking forward to the psp2
That's funny could have sworn the DS just sold 1.4m units. Oh, and the PSP2 will do just fine.
PSP2 200 millions sells confirms! Thank you Pachter for the Doomed :p More seriously even if i am more a Nintendo guy, i must admit that i can see the PSP2 have more success than the 3DS. Why? Because as Nintendo have more push over the expended audience to achieve the insane DS sales, they can't do it anymore with the 3DS as Apple with the iOS devices is fishing heavily on Nintendo blue ocean. On the other hand, the PSP2 will be again a powerhouse (likely more powerful than the 3DS) and if they address the 2 analogues stick complain, will cater to a lot of game enthusiasts (the "hardcore gamers") as a result to get more sale from the gamers than the 3DS if this time they succeed to make the system really portable (8~10 hours battery autonomy).
WTF is this guy talking about? DS sales are going down because it's already owned by 135+ million people. How much does a hand held system need to sell in order to be considered successful? I doubt the PSP2 will sell well, but It certainly won't kill the system. Maybe this guy means that PSP2 won't expand on Sony's wealth, just maintain it, or possibly not hold up to what it once was. In that case, maybe yeah. But to say that the hand held gaming industry is dying? That's quite a bit extreme. I think this "Pachter" character needs to visit this site.
"starting to see the DS hardware sales crack" well yeah, it's getting pretty old by now. Also it is going to be the highest selling console ever VERY soon, so it's probably safe to say everyone and their grandmas have a DS. Fact is, the handheld market grew heaps in terms of hardware sales, and even more in terms of software sales. The Iphone is expanding the market further, as opposed to stealing sales from the others. And yeah, the handheld market has grown to the size where it can easily support Apple, Nintendo and Sony quite confortably. The PSP2 will do fine. Of course it wont even come close to the 3DS, but why does that matter?
@FonzGemini I think some believe agree with him and some people disagree with him.... @RockMan10 Keep in mind Pachter works for an investment firm. What he's really saying, and what a lot of people miss, is that you should not invest in gaming handhelds. This is because people want to grow their money. If the PSP2 sells a million units, if you invest in SONY is that a good investment? If the 3DS sells 10 millions units, if you invested in Nintendo, what would you make if you invested in Nintendo? How many units would they need to sell in order for an investor to earn money? Also keep in mind, investors have way more options then just investing into game companies. I have no clue what the answers are... but my impression of the comments is that not many have thought about what Pachter said other then "its sound negative towards something I like" It's really hard to disagree with him unless there's some really strong evidence that the 3DS or PSP2 will be able to generate huge demand.
PSP2 DOA? thanks Mr. Pachter, you just ensured that PSP2 will become the best selling handheld until its successor appears!
Why does everybody say the PSP has issues? Its #1 selling in japan, and it has sold 60 million units... thats more than xbox or ps3. Just because the DS sold a shit ton doesn't mean the PSP is a failure? If they have good software I dont see why it would flop.
Nintendo should pair up with Nokia and make a N-Gage like gameboy phone. Have it available as a phone/system, or just as a system alone. That will sell, a lot of people want full games on their phone, not just apps. Do that, have apps still available, you're set. Add in some lights and funky colours and the Japan market will LOVE YOU
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@cunger Yeah that's the issue with the PSP. It's a portable PS3/PS2. It doesn't have much of it's own identity. The PSP spanks the PS3 in the jrpg department (which is why I own one. Handhelds are where it's at for jrpgs this gen. Not home consoles) but other than the solid jrpg library and some of the more unique PSP games, the PSP mainly has watered down PS3/PS2 ports or watered down versions of PS3/PS2 franchises. And the kicker is that the PSP's more unique games don't seem to sell that well and the jrpgs aside from Crisis Core are too niche to sell big in the west.
@Jedidiah-Rose That's always been the problem with the psp. That they focused too much on it being a portable console. Handheld's need to be different with a different game lineup and a different type of experience to be successful. They won't gain anything by getting a direct COD port to the psp2. Who's going to buy the psp2 version when they can buy he ps3 version of the game which is identical. Compare that to Nintendo where as a gamer i would buy New Super Mario Bros on the Wii and on the DS since they are a different game. Just my thoughts. A portable system will fail if they rely on console ports.
It's just wind people. This man is smart but I think he misses the target on this topic. What you guys might not realize is that each company (Apple, Sony, Nintendo) have gotten into a grove of releasing of releasing minor hardware upgrades every year or so. Apple did it with their phone every year and every year the dbag hipsters bought it and their girlfriend would buy it. Sony did it and made a bundle for every monster hunter game released to push it. Nintendo did it just to make their first model be called phat only to later make their latest model be called extra large. People buy whats new even its just cosmetic. Seriously, even the N-gage had a hardware upgrade and its biggest feature was just to play games without having to remove the damn battery. I know why he thinks Iphone/touch will leave the Sony and Nintendo lose in the handheld console market becuase he thinks they aren't progressing, but Apple needs to keep up too otherwise they'll lose those hipster dbags from buying copy and paste.
Now is the time for someone to bring up the graphic of his prediction he made back in 2006 about this gen consoles sales, the one where PS3 was going to dominate and where the Wii was supposed to have negative sales after 3 years on the market. ''We’re starting to see DS hardware sales crack'' lol. This guy made my day.
I think the PSP2 will find some level of success if it has a two analog stick design and has more online intergration.Where as everyone seems to think the 3DS will innovate like Ninted has "innovated" with the Wii and DS,the PSP2 wil pack some impressive power,and though that didn't help the PSP,with a two analog design and greater online functionallity the power of the PSP2 will allow games like CoD to be easily developed on the system. The PSP was Sony's first true forray into the handheld market,and they didn't promote it with enough games at it's original launch.Uncharted,InFamous,Killzone,Wipeout,Little Big Planet,Resistance and Gran Turrismo could all be possible releases for the system within it's first year on the market.The system is worthwhile,far more worthwhile than the 3DS if you ask me,and that's not trolling remark,I just don't like Nintendo for having the audacity to proclaim they can do 3D without glasses on a handheld.However impressive any who've used it already may claim the technology to be,I very much doubt it could be as awe inspiring as the moment we sat down in IMAX to watch James Cameron's Avatar or as involving as a Playstation Move based 3D experience could be.I just find it pretty doubtful Nintendo could deliver as good a 3D experience as Sony,Samsung,LG and Panasonic's screens or indeed as amazing as an IMAX experiene.
I understand what he's saying, but the handheld market was so bloody huger this gen, it can stand another entry. If the DS and PSP somehow only sold 80 and 30 million units next gen, that's still not bad, especially considering how the GameCube and XBox did yet still remaining viable systems.
Ugh, really wish people would stop comparing handheld consoles to the freakin Iphone. They are two separate things! Might as well compare PCs to home consoles..
"DS sales crack"?... it just sold over a million in one week on it's 6th year out? is there even a need for a 3DS yet?
On this subject I have to agree with Mr. Pachter. PSP2 and 3DS seem like way to narrow minded products. With 3rd party developers jumping into smartphone, and multimedia devices dedicated handheld game systems look like a joke. I have owned multiples of GB, GBC, GBA, DS, and PSP, but I see no more reason to buy a game device. I will be getting the PSP Phone if it turns out to be a dedicated games platform, but I won't buy another dedicated games device. For those that find this rubbish. I just want to say, I am the only one in my family that still ownes a PSP or DS. Everyone of my 2 bothers and sisters, 6 first cosins has either never had one or sold it for money towards smart phone. I only have my PSP Go! left out of all my HH's and that is just to play, MGSPW, and GOWGOS.
Pachter is truly representative of the state of videogame journalism/analysis : Pure bullshit.
i have gotten more playtime off of my $1 plants vs. zombies download for my iphone than pretty much any $20-$30 ds download, ... and that pretty much sums up why i tend to agree with patcher. i don't really think it's "apple" so much as mobile mutli-tasking devices like iphone and android devices have a much brighter future than dedicated gaming devices. i mean, go look at garmin - i saw an article a week or so ago about them being down 30% YoY and we all know why....
I think i agree with this, but its not like the iTouch has a clean run at it. Apple is going to be under growing pressure from android OS phones, so its not like all new handheld games will be coming out of Apple's app store. So it'll be harder for an Apple to become a viable alternative platform to a nintendo or ps handheld when it'll have trouble fighting off all these other handhelds, meaning it might not get as much support. Just my 2 cents.
He might be right. The X-factor is if the psp2 comes 3g connected. Online play anywhere anytime could be a big draw.
Right up there with other all-time greats such as, "The Titanic is unsinkable", "Trickle-down economics works", "Housing prices go up forever", and "These CDOs are rated AAA".
@CrashDestroyer Sony already has PSN and they also introduced Minis. Also last I heard, Android has their own app store yet despite the number of devices sold it doesn't have the number of games or the number of users downloading games. Same goes for BB. It's not THAT easy to replicate what Apple has.
I think Patcher thinks that Sony and Nintendo won't release an app store like Apple's. Of course they will, Sony and Nintendo aren't stupid. I personally think the iPod Touch is in a bigger danger then the 3DS and PSP2, because if the PSP2 and the 3DS have an app store like the iPod Touch, the Touch has nothing to go for it.
What Patcher doesn't know is that the PSP2 will come with built-in 3g or 4g network, obviously you have to pay a fee if you want to play online on the go, but that alone will be a system seller for me, it will be the first portable gaming system to do so, now let the fee be no more than $5 a month..
@greenmedic88 I think that's a very interesting point and in all honesty most ds games are over priced. I'm hoping that a lot of the 3ds shovel games end up going "download only" on the system and leave shelf space for the zelda's, call of duty's, metal gear's, ect. One thing Nintendo really needs to do on the 3ds is remove size limitation on the "download only" games or increase it to something realistic like 2gig or something. I personally plan on inserting a 16 gig sd card the day i pick one up.
@hduser There's no doubt the iphone/android and all that is going to swallow up some of the casual gamers that the DS had but they will also appeal mostly to people who didn't even own a ds but would play some simple games here and there if they could do it on their phone. But as a Nintendo fan who is a hardcore gamer this is great news. Because it means Nintendo is going to focus more on the hardcore side of handheld gaming. The fact is that people enjoy fresh experiences. Right now the Ipod is a fresh experience compared to the DS but people will grow tired of the ipod experience. And the fact is that that Apple won't innovate in ways that only matter to games and Nintendo will. Apple has way too much on their plate to go toe to toe with Nintendo on game innovation. 3d wouldn't even be enjoyable on a screen where you're touching the screen. It would kill the 3d effect because you'd be touching where the screen is while the 3d effect really eliminates the screen and allows images to be played in the foreground and background.
The question should be whether there will still be a large enough market for $20-40 portable games in the future and whether the PSP2 and 3DS will place major emphasis on "minis" or sub $5 games in terms of sheer volume of overall games. Of course the games are better on a dedicated portable. The question is does Joe Average Consumer consider them worth the dedicated portable price.
I don't fully disagree with him. It does make sense. I think the casual gamers will stick with the iphone/itouch as the Apple app store delivery system is pretty good at getting the $1-5 purchases undercutting nintendo. I guess the main thing about PSP2 and nintendo ds is: Is there enough of a market down the road for non-casual gaming on the go?
lol this guy becomes more irrelevant every time he opens his mouth.. sure i want a 3ds, but at what cost if it works out more expensive than psp2 i knwo where i will be going, and yes i will wait to find out as i cannot afford a 3ds just yet anyways
PSP2 big hit confirmed then? I remember he said the same thing about the Wii. We all know how that turned out.
Oigh. Why bother reporting this shit? People always post about what Pachter says and his predictions rarely come true.
Pachter you understand that Nintendo and Sony can have an App Store just like Apple? And who cares for parents or occasional gamers, handhelds will survive as long as people want real games and Wii/DS showed that also casual gamers can buy an expensive system for expensive games...
Sure market is starting to saturate to DS and PSP, this is why they are being renewed with 3DS and PSP2 soon enough... Perhaps he thinks that if the marketing weren't dying it would keep selling up to 6 billions DS?
Growth is important guys.... just because something still sells doesn't mean its a good investment. You have to keep in mind Pachter works for an investment firm.
The people who buy an iPod touch or a nano want the latest phone that's what they always planned on buying there not people turning from handheld consoles to phones with paid subscriptions.the handheld consoles are going to sell like normal. Your not going to find resident evil,metal gear,pokemon,god of war,sonic,mario,castlevaina and all those other games on the ipod you might find a "phone" version of the game but it's not going to be the same. Also he says “We’re starting to see DS hardware sales crack" DAMMIT OF COURSE IT IS IT'S BEN OUT FOR YEARS!! it's like when people say oh the Wii's sales are dying I guess the "FAD" is wearing off...................... yeah *facepalm* it's been out for years that's why it's dying off. The reason the PSP2 would die off is because it dose a graphics update and no more. The DS is going 3D and needs no glasses which makes it look fresh and new the PSP with nothing more than updated looks would pretty bad especially with the 3DS getting developer support from all the major developers now as well as having games that look amazing on it graphically now. That's what i think.
Can anyone tell me the last time this guy made an accurate prediction? It seems to me that we can pretty much take the opposite of what he says to the bank.
So we're starting to see DS sales crack? Because the DS just hit 140m units and counting. Eventually it will even outsell PS2, so makes me think.... Also I doubt the handheld market is any trouble. Both the PSp and DS are outselling both HD home consoles, and DS even outsells the highest selling home console. So the handheld market is hardly in trouble. The funny thing is, if we go by Apple as market leader like Pachter thinks (PAH!), the handheld market would be even more intriguing.
It makes sense in some ways. The 3DS and the iX whatever portables are double teaming the PSP2. The former with core games and the 3D effect and the latter with cheap games and basic types of games.
Most free or 1$ games are priced that way for a reason. You won't be finding Metal Gear Solid on the ipod for free.
My kids tired very quickly of the games on the ipod. They have no depth and therefore are only playable for short periods of time.
The reason Micheal Patcher keeps making the news is that he keeps making bold statements. Right or wrong these types of statements are newsworthy and Patcher knows it. The fact is that he should know better but I don't think that he can help himself. The DS sold over 1.4 million new units of hardware this week and he talks about how handhald gaming is dying. Kids are kids and they will always want that shiny new toy. But it won't be long before they start wanting 3ds's and psp2's and ipads and itouch's will feel old to them. Nothing keeps it's shine for ever and apple is not going to be immune to this. He aks like Nintendo is delaying the inevitable by putting out a terrific product in the 3ds. The fact is that Nintendo has always lived and died by the quality of their new experience. Same goes for Apple. Yeah if Nintendo stops innovating and puts out generic products they'll have a rough time but that won't happen anytime soon with their new multi billion dollar R&D facility in Japan that is dedicated to game innovations. PSP2 might not do so well though as it doesn't seem like there will be enough different about it to separate it from Ipod and 3ds...
I know he's full of it because it's just part of this new "Apple is the new handheld king" crap that the gaming press and industry are falling over themselves to declare. They did the same with Sony and handhelds.
I disagree a bit in that while parents will surely rather pay $1-$3 for a downloadable game on the other mobile gadgets, they are less likely to purchase a $300 -$500 gadget/phone with an applicable plan than they are a $200 Nintendo system that has backward compatibility with their existing games AND has $2-$5 downloadable games as well. I know I'd rather by my kids a DS/3DS than a iWhatever or Android Phone/Tablet. Additionally, the games themselves, for now, are simply better. Except I have been stuck on Angry Birds on my Samsung Fascinate.
